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Borrowers not benefiting from interest rate cuts

 

Barclays mortgage customers not benefiting from interest rate cuts

Around half a million homeowners on tracker deals with Barclays will have to wait until October next year to feel the benefit of the 1.5% cut in interest rates. This comes as a result of Barclays fixing their tracker mortgage repayments for 12 months, rather than tracking the interest rates on a monthly basis. As a result homeowners with a £150,000 mortgage are missing out on potential savings of around £200 a month.

Borrowers with Barclays are able to benefit from this cut in interest rates through contacting their lender and asking them to recalculate their repayments. However, if the Bank of England makes further cuts in interest rates, borrowers would have to contact their lenders again.

Few lenders include the annual review scheme in new mortgage deals but experts believe that hundreds of thousands of homeowners on older tracker deals with other lenders could also be subject to an annual adjustment in their repayments.

Borrowers have been advised to check with their lender and to opt out of the scheme if they can.

Post Office in talks with Bank of Ireland

The Post Office is in talks with the Bank of Ireland to create a current account that offers unlimited guarantee on deposits. This comes after MP's are pressured to make a public sector ‘peoples bank' which will provide basic financial services to those most in need.

This news comes after the announcement that the Post Office would retain the £1billion, 5 year contract to distribute benefits to 4.3million claimants.

Savers encouraged to act fast as rates descend

Saving interest rates offered by banks are now being altered to reflect the 1.5% in interest rates that occurred earlier this month. As banks are still in need of depositor's money, there are still competitive rates to be found, but savers should move fast to get the best rates. Typically the most competitive savings rates are found in fixed rate accounts that tie up the customer's money for a specified period of time, which is typically a year.

Financial advisors are also encouraging savers to spread their savings across a few different accounts.

 

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